Reference no: EM132090148

Please, write 2 or 3 paragraph for this discussion

Network Technologies is a small, hi-tech electronics company located in Huntsville, Alabama, and has been developing the basic components for a fiber-optic/wireless communications router that will combine satellite-driven signals and ground-based Internet services. Unfortunately, their internal R&D funding for the next two years is not sufficient to complete the design into an operable, producible system. In addition, their current small production facilities are all over-scheduled, over budget, and at capacity limits on their current products. The new router has the potential to dominate the industry for at least two years and domestic (US) revenue projections are solid for five years. International sales are estimated to be at least 3 times more than domestic sales.

They have several options, however, that could mitigate their problems. One option considered by NetTech is approaching a larger company such as Motorola or D-Link looking for some kind of cooperative agreement, an agreement whereby the partner would provide the majority of the final development funding. In fact, a Japanese-based company: “Fiber Specialists”, has been in discussions with NetTech for the last six months looking for a Joint Venture opportunity to co-develop new products for both companies. They are willing to invest at least 8 billion yen. Details, however, remain sketchy as the negotiations have been temporarily suspended and the legal team at NetTech is apprehensive about retaining the proprietary rights to this key technology. In another option facing NetTech, through the University of Alabama-Huntsville, NetTech has been contacted by the University of New Delhi. The University of New Delhi is looking for continuing education opportunities where its engineering students can get realistic application studies. They have volunteered 5-10 undergraduate engineers at no cost to NetTech as an anoutsourced option to complete the Systems Analysis portion of the final design. But, the work would be conducted in the labs in New Delhi. Finally, as a third option, NetTech currently has in place existing cooperative licensing agreements with “LightStrokes Limited ” (LS Ltd), a small company based in Scotland for co-production of existing NetTech designs. LS Ltd has expressed an interest in the new technology and is willing to make whatever capital changes are necessary to produce the new products at their facility in Glasgow.

Question:

NetTech would like to proceed but is unsure which option or collection of options would be in their long-term best interests. Assume that you are the Product Line Manager responsible for the future plans for the new router. Given that several competitors are working on similar designs, you have 3-6 months to move on this product before losing your competitive edge. NetTech management feels that they need to have a plan in place within the next 2-3 weeks. Which of the above options would you recommend to NetTech management?